My main goal* was to build an investment and cash portfolio of $1,120,000* in 1500 days**, starting from 1/1/2013 and ending in February of 2017. I made my goal in 2016, my 1500 Days are over, and I’ve left my job. In the interest of openness, I’ll continue to share my numbers.
My Favorite Employees
In my last post, I broke down how my portfolio had performed since I started this blog about 66 months ago. In case you didn’t see it (and because I’m lazy and have no issue with repurposing old material for filler), here it is:
When I started this blog on January 1st of 2013, our investment portfolio was worth $586,043. 66 months later, it’s worth $1,634,242 for a gain of $1,048,199. That breaks down to increases of $15,881 per month. But not so fast:
- $100,000 of this gain is due to a house sale that we put into the markets.
- Another $150,000 of gains is due to 401(k) contributions.
- A little more (somewhere south of $50,000) is due to after-tax investments.
After subtracting these contributions, my portfolio appreciated by about $11,336 per month or $136,032 per year.
That is nothing to sneeze at. And the amazing thing is this:
I’m just getting started.
I’ve only been investing for two decades. At 44, I have about five more decades to live. Two decades ago, I started at -$60,000 (college loan and credit card debt). Now, I’m starting with a portfolio of $1,634,242.
When Mrs. 1500 quits her job, we’ll have to use some of this money to live on, but not much. We can get by on $40,000 per year. With all of our travel, fancy beer and other silly hobbies, round it up to $50,000 per year. But wait; in 9 years our home will be paid off, so our annual expenses will decrease by $14,000. We also have $400,000 in home equity.
No big deal. We’ll be fine.
Why am I telling you all of this? The meaning of the story is this:
It’s far better to let your dollars work for you than to work for dollars. Dollars are my favorite employees.
Let’s look into the crystal ball and make some predictions about how quickly my portfolio will grow. If it grows at 7% every year, it will double every 10 years:
- Optimistic view: With dividend reinvestment and continuing contributions in the near term, I expect it to double quicker.
- Pessimistic view: We will have to start drawing our nest egg down when Mrs. 1500 leaves work. Also, the markets currently sit at lofty valuations.
I’m going to be conservative here and assume doubling every 10 years. The first number is my age:
- 44 (now): $1,600,000
- 54: $3,200,000
- 64: $6,400,000
- 74: $12,800,000
- 84: $25,600,000
- 94: $51,200,000
That’s a lot of money! And lots of money can cause problems that only the very rich have to worry about…
Mrs. 1500’s Next Husband
I hope Mrs. 1500 doesn’t die first. If she does and my mind turns to mush, am I at risk of one of these situations?:
Did that guy die happy? Did she?
Maybe the opposite will happen? I’ll kick off early and Mrs. 1500 will hook up with someone 45 years younger. Mrs. 1500, if this happens, have a good time!!!
Our money has done amazing things, but the best days are ahead, gold diggers aside.
June Performance Update
June was another solid month. Our net worth started the month at $2,129,970 and ended at $2,149,222 for a gain of $19,252:
2018 (as of 7/1/2018)
- Days elapsed: 182
- Investment portfolio gains: $106,521 (including 401(k) contributions**** of $23,289)
- Net worth gains: $156,521 (investment portfolio gain of $106,521 + home appreciation of $50,000)
Since the start (1/1/2013)
- Days elapsed: 2006
- Investment portfolio and cash: $1,634,242
- Gains since 1/1/2013: $1,048,179
- Needed to quit work ($1,120,000 in investments): Mission accomplished!
Net worth: $2,149,242. This includes:
- Investment portfolio and cash: $1,634,242
- Home equity: $450,000
- Silly toy car: $45,000
- Other cars, bikes, dinosaurs: $20,000
We have a diverse portfolio that includes real estate:
- mobile home park (elevated home park to the easily offended)
- private loan (only one outstanding)
- syndication deals
And stock market holdings:
- individual stocks (old thinking)
- index funds (most money goes here now)
Here is the breakdown:
- Stock market: $878,978
- Monthly gain: $16,735
- 2018 gain: $89,192
- Real estate: $735,264
- Monthly gain: $2,537
- 2018 gain: $17,349
- Cash reserve: $20,000
The market side of my portfolio is demolishing the real estate side. I diversified into real estate because of lofty market valuations. Since I started implementing this plan almost 2 years ago, the markets have rocketed upwards. The real estate investments make money every month, but the gains are slow:
- Trailer park: We knew this needed a lot of work going into it. We’re putting all money back into the park. So, we’ve earned $0.
- Syndication deals: All of these deals are making money, but the initial payments are small. They increase as the properties are rehabbed and rents are increased. The big payout comes in 5-10 years when the property is sold.
- Private loans: We only have one loan outstanding now. We may hunt for more. Need money? You better have a good plan, but I’ll hear your pitch!
Life Is Good
I have no clue if I’ll end up with a fortune of $51,000,000. It doesn’t matter that much either as I’m happy now with my lot in life. I have a good family, good friends and everything else is pretty good too. We just got back from a huge trip where we frolicked near the ocean:
And in the mountains:
While the traveling is fun, the best part of having money is that it frees you from having to worry or even think much about money. I don’t have to be concerned about feeding my family if I get fired. I don’t have to worry if I’ll lose the house if I can’t make ends meet. I don’t worry about a major home repair setting back our finances for 6 months. All of these concerns are now background noise.
Meanwhile, those dollars continue to work hard. At the end of most months, there are more dollars than when the month started. They’re like rabbits. Or maybe even Tribbles.
Life is good.
*My goal wasn’t to have $1,120,000 at the end of 1500 days, but at any time before the day count was up. Why? It all goes back to the 4% Rule. Remember that our little friend, Mr. 4%, is nothing more than the most conservative safe withdrawal rate. So, if I were to quit my job now, I could spend about $60,000 in my first year of retirement.
**My original goal was $1,000,000 and no debt, I later raised the goal by $120,000 to $1,120,000 because I will have debt in the form of a mortgage and I firmly believe in not paying it off. My compromise is to have enough money put away to cover the mortgage at the time of retirement. So, to retire today, I would need about $1,120,000.
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****My 401(k) contributions include my own, Mrs. 15oo’s, and the contributions from my corporation. Self-employment with a solo 401(k) is a very powerful savings tool. I should have done this years ago.
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